IB 

Union Calendar No. 545 

114TH CONGRESS 

2D SESSION H. R. 4341 

[Report No. 114–704, Part I] 

To amend the Small Business Act to improve transparency and clarity for 

small businesses, to clarify the role of small business advocates, to 

increase opportunities for competition in subcontracting, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 2016 

Mr. CHABOT (for himself and Ms. VELA ́ZQUEZ) introduced the following bill; 

which was referred to the Committee on Small Business, and in addition 

to the Committees on Armed Services, Oversight and Government Reform, and Veterans’ Affairs, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

JULY 25, 2016 

Reported from the Committee on Small Business with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

JULY 25, 2016 

The Committees on Armed Services, Oversight and Government Reform, and 

Veterans’ Affairs discharged; committed to the Committee of the Whole 

House on the State of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on January 7, 2016] 


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A BILL 

To amend the Small Business Act to improve transparency 

and clarity for small businesses, to clarify the role of 

small business advocates, to increase opportunities for 

competition in subcontracting, and for other purposes. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 (a) SHORT TITLE.—This Act may be cited as the ‘‘De5 fending America’s Small Contractors Act of 2016’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title. 

TITLE I—IMPROVING TRANSPARENCY AND CLARITY FOR SMALL 

BUSINESSES 

Sec. 101. Plain language rewrite of requirements for small business procurements. 

Sec. 102. Improving reporting on small business goals. 

Sec. 103. Transparency in small business goals. 

Sec. 104. Uniformity in procurement terminology. 

TITLE II—CLARIFYING THE ROLES OF SMALL BUSINESS 

ADVOCATES 

Sec. 201. Scope of review by procurement center representatives. 

Sec. 202. Responsibilities of Commercial Market Representatives. 

Sec. 203. Duties of the Office of Small and Disadvantaged Business Utilization. 

Sec. 204. Improving contractor compliance. 

Sec. 205. Responsibilities of Business Opportunity Specialists. 

TITLE III—STRENGTHENING OPPORTUNITIES FOR COMPETITION IN 

SUBCONTRACTING 

Sec. 301. Good faith in subcontracting. 

Sec. 302. Pilot program to provide opportunities for qualified subcontractors to 

obtain past performance ratings. 

TITLE IV—MENTOR-PROTEGE PROGRAMS 

Sec. 401. Amendments to the Mentor-Protege Program of the Department of Defense. 

Sec. 402. Improving cooperation between the mentor-protege programs of the 

Small Business Administration and the Department of Defense. 

TITLE V—MISCELLANEOUS 

Sec. 501. Improving education on small business regulations. 

Sec. 502. Protecting task order competition. 

Sec. 503. Improvements to size standards for small agricultural producers. 

Sec. 504. Uniformity in service-disabled veteran definitions. 

Sec. 505. GAO review of the Office of Government Contracting and Business Development of the Small Business Administration. 


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Sec. 506. Required reports pertaining to capital planning and investment control. 

Sec. 507. GAO review of surety bonds. 

1 TITLE I—IMPROVING TRANS2 PARENCY AND CLARITY FOR 

3 SMALL BUSINESSES 

4 SEC. 101. PLAIN LANGUAGE REWRITE OF REQUIREMENTS 

5 FOR SMALL BUSINESS PROCUREMENTS. 

6 Section 15(a) of the Small Business Act (15 U.S.C. 

7 644(a)) is amended to read as follows: 

8 ‘‘(a) SMALL BUSINESS PROCUREMENTS.— 

9 ‘‘(1) IN GENERAL.—For purposes of this Act, 

10 small business concerns shall receive any award or 

11 contract if such award or contract is, in the deter12 mination of the Administrator and the contracting 

13 agency, in the interest of— 

14 ‘‘(A) maintaining or mobilizing the full 

15 productive capacity of the United States; 

16 ‘‘(B) war or national defense programs; or 

17 ‘‘(C) assuring that a fair proportion of the 

18 total purchase and contracts for goods and serv19 ices of the Government in each industry category 

20 (as described under paragraph (2)) are awarded 

21 to small business concerns. 

22 ‘‘(2) INDUSTRY CATEGORY DEFINED.— 

23 ‘‘(A) IN GENERAL.—In this subsection, the 

24 term ‘industry category’ means a discrete group 


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1 of similar goods and services, as determined by 

2 the Administrator in accordance with the North 

3 American Industry Classification System codes 

4 used to establish small business size standards, 

5 except that the Administrator shall limit an in6 dustry category to a greater extent than provided 

7 under the North American Industry Classifica8 tion codes if the Administrator receives evidence 

9 indicating that further segmentation of the in10 dustry category is warranted— 

11 ‘‘(i) due to special capital equipment 

12 needs; 

13 ‘‘(ii) due to special labor requirements; 

14 ‘‘(iii) due to special geographic re15 quirements, except as provided in subpara16 graph (B); 

17 ‘‘(iv) due to unique Federal buying 

18 patterns or requirements; or 

19 ‘‘(v) to recognize a new industry. 

20 ‘‘(B) EXCEPTION FOR GEOGRAPHIC RE21 QUIREMENTS.—The Administrator may not fur22 ther segment an industry category based on geo23 graphic requirements unless— 

24 ‘‘(i) the Government typically des25 ignates the geographic area where work for 


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1 contracts for goods or services is to be per2 formed; 

3 ‘‘(ii) Government purchases comprise 

4 the major portion of the entire domestic 

5 market for such goods or services; and 

6 ‘‘(iii) it is unreasonable to expect com7 petition from business concerns located out8 side of the general geographic area due to 

9 the fixed location of facilities, high mobili10 zation costs, or similar economic factors. 

11 ‘‘(3) DETERMINATIONS WITH RESPECT TO

12 AWARDS OR CONTRACTS.—Determinations made pur13 suant to paragraph (1) may be made for individual 

14 awards or contracts, any part of an award or con15 tract or task order, or for classes of awards or con16 tracts or task orders. 

17 ‘‘(4) INCREASING PRIME CONTRACTING OPPORTU18 NITIES FOR SMALL BUSINESS CONCERNS.— 

19 ‘‘(A) DESCRIPTION OF COVERED PROPOSED

20 PROCUREMENTS.—The requirements of this 

21 paragraph shall apply to a proposed procure22 ment that includes in its statement of work goods 

23 or services currently being supplied or performed 

24 by a small business concern and, as determined 

25 by the Administrator— 


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1 ‘‘(i) is in a quantity or of an estimated 

2 dollar value which makes the participation 

3 of a small business concern as a prime con4 tractor unlikely; 

5 ‘‘(ii) in the case of a proposed procure6 ment for construction, if such proposed pro7 curement seeks to bundle or consolidate dis8 crete construction projects; or 

9 ‘‘(iii) is a solicitation that involves an 

10 unnecessary or unjustified bundling of con11 tract requirements. 

12 ‘‘(B) NOTICE TO PROCUREMENT CENTER

13 REPRESENTATIVES.—With respect to proposed 

14 procurements described in subparagraph (A), at 

15 least 30 days before issuing a solicitation and 

16 concurrent with other processing steps required 

17 before issuing the solicitation, the contracting 

18 agency shall provide a copy of the proposed pro19 curement to the procurement center representa20 tive of the contracting agency (as described in 

21 subsection (l)) along with a statement explain22 ing— 

23 ‘‘(i) why the proposed procurement 

24 cannot be divided into reasonably small lots 

25 (not less than economic production runs) to 


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1 permit offers on quantities less than the 

2 total requirement; 

3 ‘‘(ii) why delivery schedules cannot be 

4 established on a realistic basis that will en5 courage the participation of small business 

6 concerns in a manner consistent with the 

7 actual requirements of the Government; 

8 ‘‘(iii) why the proposed procurement 

9 cannot be offered to increase the likelihood 

10 of the participation of small business con11 cerns; 

12 ‘‘(iv) in the case of a proposed procure13 ment for construction, why the proposed 

14 procurement cannot be offered as separate 

15 discrete projects; or 

16 ‘‘(v) why the agency has determined 

17 that the bundling of contract requirements 

18 is necessary and justified. 

19 ‘‘(C) ALTERNATIVES TO INCREASE PRIME

20 CONTRACTING OPPORTUNITIES FOR SMALL BUSI21 NESS CONCERNS.—If the procurement center rep22 resentative believes that the proposed procure23 ment will make the participation of small busi24 ness concerns as prime contractors unlikely, the 

25 procurement center representative, within 15 


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1 days after receiving the statement described in 

2 subparagraph (B), shall recommend to the con3 tracting agency alternative procurement methods 

4 for increasing prime contracting opportunities 

5 for small business concerns. 

6 ‘‘(D) FAILURE TO AGREE ON AN ALTER7 NATIVE PROCUREMENT METHOD.—If the procure8 ment center representative and the contracting 

9 agency fail to agree on an alternative procure10 ment method, the Administrator shall submit the 

11 matter to the head of the appropriate department 

12 or agency for a determination. 

13 ‘‘(5) CONTRACTS FOR SALE OF GOVERNMENT

14 PROPERTY.—With respect to a contract for the sale of 

15 Government property, small business concerns shall 

16 receive any such contract if, in the determination of 

17 the Administrator and the disposal agency, the award 

18 of such contract is in the interest of assuring that a 

19 fair proportion of the total sales of Government prop20 erty be made to small business concerns. 

21 ‘‘(6) SALE OF ELECTRICAL POWER OR OTHER

22 PROPERY.—Nothing in this subsection shall be con23 strued to change any preferences or priorities estab24 lished by law with respect to the sale of electrical 

25 power or other property by the Federal Government. 


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1 ‘‘(7) COSTS EXCEEDING FAIR MARKET PRICE.— 

2 A contract may not be awarded under this subsection 

3 if the cost of the contract to the awarding agency ex4 ceeds a fair market price.’’. 

5 SEC. 102. IMPROVING REPORTING ON SMALL BUSINESS 

6 GOALS. 

7 Section 15(h)(2)(E) of the Small Business Act (15 

8 U.S.C. 644(h)(2)(E)) is amended— 

9 (1) in clause (i)— 

10 (A) in subclause (III), by striking ‘‘and’’ at 

11 the end; and 

12 (B) by adding at the end the following new 

13 subclauses: 

14 ‘‘(V) that were purchased by an15 other entity after the initial contract 

16 was awarded and as a result of the 

17 purchase, would no longer be deemed to 

18 be small business concerns for purposes 

19 of the initial contract; and 

20 ‘‘(VI) that were awarded using a 

21 procurement method that restricted 

22 competition to small business concerns 

23 owned and controlled by service-dis24 abled veterans, qualified HUBZone 

25 small business concerns, small business 


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1 concerns owned and controlled by so2 cially and economically disadvantaged 

3 individuals, small business concerns 

4 owned and controlled by women, or a 

5 subset of any such concerns;’’; 

6 (2) in clause (ii)— 

7 (A) in subclause (IV), by striking ‘‘and’’ at 

8 the end; and 

9 (B) by adding at the end the following new 

10 subclauses: 

11 ‘‘(VI) that were purchased by an12 other entity after the initial contract 

13 was awarded and as a result of the 

14 purchase, would no longer be deemed to 

15 be small business concerns owned and 

16 controlled by service-disabled veterans 

17 for purposes of the initial contract; 

18 and 

19 ‘‘(VII) that were awarded using a 

20 procurement method that restricted 

21 competition to qualified HUBZone 

22 small business concerns, small business 

23 concerns owned and controlled by so24 cially and economically disadvantaged 

25 individuals, small business concerns 


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1 owned and controlled by women, or a 

2 subset of any such concerns;’’; 

3 (3) in clause (iii)— 

4 (A) in subclause (V), by striking ‘‘and’’ at 

5 the end; and 

6 (B) by adding at the end the following new 

7 subclauses: 

8 ‘‘(VII) that were purchased by an9 other entity after the initial contract 

10 was awarded and as a result of the 

11 purchase, would no longer be deemed to 

12 be qualified HUBZone small business 

13 concerns for purposes of the initial 

14 contract; and 

15 ‘‘(VIII) that were awarded using 

16 a procurement method that restricted 

17 competition to small business concerns 

18 owned and controlled by service-dis19 abled veterans, small business concerns 

20 owned and controlled by socially and 

21 economically disadvantaged individ22 uals, small business concerns owned 

23 and controlled by women, or a subset 

24 of any such concerns;’’; 

25 (4) in clause (iv)— 


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1 (A) in subclause (V), by striking ‘‘and’’ at 

2 the end; and 

3 (B) by adding at the end the following new 

4 subclauses: 

5 ‘‘(VII) that were purchased by an6 other entity after the initial contract 

7 was awarded and as a result of the 

8 purchase, would no longer be deemed to 

9 be small business concerns owned and 

10 controlled by socially and economically 

11 disadvantaged individuals for purposes 

12 of the initial contract; and 

13 ‘‘(VIII) that were awarded using 

14 a procurement method that restricted 

15 competition to small business concerns 

16 owned and controlled by service-dis17 abled veterans, qualified HUBZone 

18 small business concerns, small business 

19 concerns owned and controlled by 

20 women, or a subset of any such con21 cerns;’’; 

22 (5) in clause (v)— 

23 (A) in subclause (IV), by striking ‘‘and’’ at 

24 the end; 


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1 (B) in subclause (V), by inserting ‘‘and’’ at 

2 the end; and 

3 (C) by adding at the end the following new 

4 subclause: 

5 ‘‘(VI) that were purchased by an6 other entity after the initial contract 

7 was awarded and as a result of the 

8 purchase, would no longer be deemed to 

9 be small business concerns owned by 

10 an Indian tribe other than an Alaska 

11 Native Corporation for purposes of the 

12 initial contract;’’; 

13 (6) in clause (vi)— 

14 (A) in subclause (IV), by striking ‘‘and’’ at 

15 the end; and 

16 (B) by adding at the end the following new 

17 subclause: 

18 ‘‘(VI) that were purchased by an19 other entity after the initial contract 

20 was awarded and as a result of the 

21 purchase, would no longer be deemed to 

22 be small business concerns owned by a 

23 Native Hawaiian Organization for 

24 purposes of the initial contract;’’; 

25 (7) in clause (vii)— 


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1 (A) in subclause (IV), by striking ‘‘and’’ at 

2 the end; and 

3 (B) by adding at the end the following new 

4 subclause: 

5 ‘‘(VI) that were purchased by an6 other entity after the initial contract 

7 was awarded and as a result of the 

8 purchase, would no longer be deemed to 

9 be small business concerns owned by 

10 an Alaska Native Corporation for pur11 poses of the initial contract; and’’; and 

12 (8) in clause (viii)— 

13 (A) in subclause (VII), by striking ‘‘and’’ at 

14 the end; 

15 (B) in subclause (VIII), by striking ‘‘and’’ 

16 at the end; and 

17 (C) by adding at the end the following new 

18 subclauses: 

19 ‘‘(IX) that were purchased by an20 other entity after the initial contract 

21 was awarded and as a result of the 

22 purchase, would no longer be deemed to 

23 be small business concerns owned and 

24 controlled by women for purposes of the 

25 initial contract; and 


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1 ‘‘(X) that were awarded using a 

2 procurement method that restricted 

3 competition to small business concerns 

4 owned and controlled by service-dis5 abled veterans, qualified HUBZone 

6 small business concerns, small business 

7 concerns owned and controlled by so8 cially and economically disadvantaged 

9 individuals, or a subset of any such 

10 concerns; and’’. 

11 SEC. 103. TRANSPARENCY IN SMALL BUSINESS GOALS. 

12 Section 15(g) of the Small Business Act is amended 

13 by adding at the end the following new paragraph: 

14 ‘‘(4) DETERMINATIONS OF THE TOTAL VALUE OF

15 CONTRACT AWARDS.—For purposes of the goals estab16 lished under paragraphs (1) and (2), the total value 

17 of contract awards for a fiscal year may not be deter18 mined in a manner that excludes the value of a con19 tract based on— 

20 ‘‘(A) where the contract is awarded; 

21 ‘‘(B) where the contract is performed; 

22 ‘‘(C) whether the contract is mandated by 

23 Federal law to be performed by an entity other 

24 than a small business concern; 


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1 ‘‘(D) whether funding for the contract is 

2 made available in an appropriations Act, if the 

3 contract is subject to the requirements of chapter 

4 33 of title 41, United States Code, or chapter 

5 137 of title 10, United States Code, and the Fed6 eral Acquisition Regulation; or 

7 ‘‘(E) whether the contract is otherwise sub8 ject to the Federal Acquisition Regulation.’’. 

9 SEC. 104. UNIFORMITY IN PROCUREMENT TERMINOLOGY. 

10 (a) IN GENERAL.—Section 15(j)(1) of the Small Busi11 ness Act (15 U.S.C. 644(j)(1)) is amended by striking 

12 ‘‘greater than $2,500 but not greater than $100,000’’ and 

13 inserting ‘‘greater than the micro-purchase threshold, but 

14 not greater than the simplified acquisition threshold’’. 

15 (b) TECHNICAL AMENDMENT.—Section 3(m) of the 

16 Small Business Act (15 U.S.C. 632(m)) is amended to read 

17 as follows: 

18 ‘‘(m) DEFINITIONS PERTAINING TO CONTRACTING.— 

19 In this Act: 

20 ‘‘(1) PRIME CONTRACT.—The term ‘prime con21 tract’ has the meaning given such term in section 

22 8701(4) of title 41, United States Code. 

23 ‘‘(2) PRIME CONTRACTOR.—The term ‘prime con24 tractor’ has the meaning given such term in section 

25 8701(5) of title 41, United States Code. 


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1 ‘‘(3) SIMPLIFIED ACQUISITION THRESHOLD.— 

2 The term ‘simplified acquisition threshold’ has the 

3 meaning given such term in section 134 of title 41, 

4 United States Code. 

5 ‘‘(4) MICRO-PURCHASE THRESHOLD.—The term 

6 ‘micro-purchase threshold’ has the meaning given such 

7 term in section 1902(a) of title 41, United States 

8 Code. 

9 ‘‘(5) TOTAL PURCHASE AND CONTRACTS FOR

10 PROPERTY AND SERVICES.—The term ‘total purchases 

11 and contracts for property and services’ shall mean 

12 total number and total dollar amount of contracts 

13 and orders for property and services.’’. 

14 TITLE II—CLARIFYING THE 

15 ROLES OF SMALL BUSINESS 

16 ADVOCATES 

17 SEC. 201. SCOPE OF REVIEW BY PROCUREMENT CENTER 

18 REPRESENTATIVES. 

19 Section 15(l) of the Small Business Act (15 U.S.C. 

20 644(l)) is amended by adding at the end the following: 

21 ‘‘(9) SCOPE OF REVIEW.—The Administrator 

22 shall not limit the scope of review by the Procurement 

23 Center Representative for any solicitation of a con24 tract or task order without regard to whether the con25 tract or task order or part of the contract or task 


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1 order is set aside for small business concerns, whether 

2 1 or more contract or task order awards are reserved 

3 for small business concerns under a multiple award 

4 contract, or whether or not the solicitation would re5 sult in a bundled or consolidated contract (as defined 

6 in subsection (s)) or a bundled or consolidated task 

7 order.’’. 

8 SEC. 202. RESPONSIBILITIES OF COMMERCIAL MARKET 

9 REPRESENTATIVES. 

10 Section 4(h) of the Small Business Act (as added by 

11 section 865 of the National Defense Authorization Act for 

12 Fiscal Year 2016 (Public Law 114–92)) is amended— 

13 (1) in the subsection heading, by striking ‘‘CER14 TIFICATION REQUIREMENTS FOR’’; 

15 (2) in paragraph (2), by redesignating subpara16 graphs (A) and (B) as clauses (i) and (ii), respec17 tively (and conforming the margins accordingly); 

18 (3) by amending clause (ii) (as so redesignated) 

19 to read as follows: 

20 ‘‘(ii) APPLICATION.—The requirements 

21 of clause (i) shall be included in any initial 

22 job posting for the position of a commercial 

23 market representative and shall apply to 

24 any person appointed as a commercial 


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1 market representative after November 25, 

2 2015.’’; 

3 (4) in clause (i) (as so redesignated), by striking 

4 ‘‘paragraph (1)’’ and inserting ‘‘subparagraph (A)’’; 

5 (5) by redesignating paragraphs (1) and (2) as 

6 subparagraphs (A) and (B), respectively (and con7 forming the margins accordingly); 

8 (6) in subparagraph (A) (as so redesignated), by 

9 striking ‘‘paragraph (2)’’ and inserting ‘‘subpara10 graph (B)’’; and 

11 (7) by inserting before subparagraph (A) (as so 

12 redesignated) the following: 

13 ‘‘(1) DUTIES.—The principal duties of a Com14 mercial Market Representative employed by the Ad15 ministrator and reporting to the senior official ap16 pointed by the Administrator with responsibilities 

17 under sections 8, 15, 31, and 36 (or the designee of 

18 such official) shall be to advance the policies estab19 lished in section 8(d)(1) relating to subcontracting. 

20 Such duties shall include— 

21 ‘‘(A) helping prime contractors to find 

22 small business concerns that are capable of per23 forming subcontracts; 


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1 ‘‘(B) for contractors awarded contracts con2 taining the clause described in section 8(d)(3), 

3 providing— 

4 ‘‘(i) counseling on the contractor’s re5 sponsibility to maximize subcontracting op6 portunities for small business concerns; 

7 ‘‘(ii) instruction on methods and tools 

8 to identify potential subcontractors that are 

9 small business concerns; and 

10 ‘‘(iii) assistance to increase awards to 

11 subcontractors that are small business con12 cerns through visits, training, and reviews 

13 of past performance; 

14 ‘‘(C) providing counseling on how a small 

15 business concern may promote its capacity to 

16 contractors awarded contracts containing the 

17 clause described in section 8(d)(3); and 

18 ‘‘(D) conducting periodic reviews of con19 tractors awarded contracts containing the clause 

20 described in section 8(d)(3) to assess compliance 

21 with subcontracting plans required under section 

22 8(d)(6). 

23 ‘‘(2) CERTIFICATION REQUIREMENTS.—’’. 


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1 SEC. 203. DUTIES OF THE OFFICE OF SMALL AND DIS2 ADVANTAGED BUSINESS UTILIZATION. 

3 Section 15(k) of the Small Business Act (15 U.S.C. 

4 644(k)), as amended by section 870 of the National Defense 

5 Authorization Act for Fiscal Year 2016 (Public Law 114– 

6 92), is amended— 

7 (1) by striking ‘‘section 8, 15 or 44’’ and insert8 ing ‘‘section 8, 15, 31, 36, or 44’’; 

9 (2) by striking ‘‘sections 8 and 15’’ each place 

10 such term appears and inserting ‘‘sections 8, 15, 31, 

11 36, and 44’’; 

12 (3) in paragraph (10), by striking ‘‘section 8(a)’’ 

13 and inserting ‘‘section 8, 15, 31, or 36’’; 

14 (4) by redesignating paragraphs (15), (16), and 

15 (17) as paragraphs (16), (17), and (18), respectively; 

16 (5) by inserting after paragraph (14) the fol17 lowing new paragraph: 

18 ‘‘(15) shall review purchases made by the agency 

19 greater than the micro-purchase threshold, and less 

20 than the simplified acquisition threshold to ensure 

21 that the purchases have been made in compliance 

22 with the provisions of this Act and have been properly 

23 recorded in the Federal Procurement Data System, if 

24 the method of payment is a purchase card issued by 

25 the Department of Defense pursuant to section 2784 

26 of title 10, United States Code, or by the head of an 


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1 executive agency pursuant to section 1909 of title 41, 

2 United States Code;’’; and 

3 (6) in paragraph (17) (as so redesignated)— 

4 (A) in subparagraph (B), by striking ‘‘and’’ 

5 at the end; 

6 (B) in subparagraph (C), by striking the 

7 period at the end and inserting ‘‘; and’’; and 

8 (C) by adding at the end the following new 

9 subparagraph: 

10 ‘‘(D) any failure of the agency to comply 

11 with section 8, 15, 31, or 36.’’. 

12 SEC. 204. IMPROVING CONTRACTOR COMPLIANCE. 

13 (a) REQUIREMENTS FOR THE OFFICE OF SMALL AND

14 DISADVANTAGED BUSINESS UTILIZATION.—Section 15(k) 

15 of the Small Business Act (15 U.S.C. 644(k)(8)), as amend16 ed by section 203, is further amended— 

17 (1) by redesignating paragraphs (16), (17), and 

18 (18) as paragraphs (17), (18), and (19), respectively; 

19 and 

20 (2) by inserting after paragraph (15) the fol21 lowing new paragraph: 

22 ‘‘(16) shall provide assistance to a small business 

23 concern awarded a contract or subcontract under this 

24 Act or under title 10 or title 41, United States Code, 

25 in finding resources for education and training on 


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1 compliance with contracting regulations (including 

2 the Federal Acquisition Regulation) after award of 

3 such a contract or subcontract.’’. 

4 (b) REQUIREMENTS UNDER THE MENTOR-PROTEGE

5 PROGRAM OF THE DEPARTMENT OF DEFENSE.—Section 

6 831(e)(1) of the National Defense Authorization Act for Fis7 cal Year 1991 (Public Law 101–510; 104 Stat. 1607; 10 

8 U.S.C. 2302 note) is amended— 

9 (1) in subparagraph (B), by striking ‘‘and’’ at 

10 the end; 

11 (2) in subparagraph (C), by striking the period 

12 at the end and inserting ‘‘; and’’; and 

13 (3) by inserting at the end the following new 

14 subparagraph: 

15 ‘‘(D) the assistance the mentor firm will 

16 provide to the protege firm in understanding 

17 contract regulations of the Federal Government 

18 and the Department of Defense (including the 

19 Federal Acquisition Regulation and the Defense 

20 Federal Acquisition Regulation Supplement) 

21 after award of a subcontract under this section, 

22 if applicable.’’. 

23 (c) RESOURCES FOR SMALL BUSINESS CONCERNS.— 

24 Section 15 of the Small Business Act (15 U.S.C. 644) is 

25 amended by adding at the end the following new subsection: 


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1 ‘‘(t) POST-AWARD COMPLIANCE RESOURCES.—The 

2 Administrator shall provide to small business development 

3 centers and entities participating in the Procurement Tech4 nical Assistance Cooperative Agreement Program under 

5 chapter 142 of title 10, United States Code, and shall make 

6 available on the website of the Administration, a list of re7 sources for small business concerns seeking education and 

8 assistance on compliance with contracting regulations (in9 cluding the Federal Acquisition Regulation) after award of 

10 a contract or subcontract.’’. 

11 (d) REQUIREMENTS FOR PROCUREMENT CENTER REP12 RESENTATIVES.—Section 15(l)(2) of the Small Business Act 

13 (15 U.S.C. 644(l)(2)) is amended— 

14 (1) by redesignating subparagraph (I) as sub15 paragraph (J); 

16 (2) in subparagraph (H), by striking ‘‘and’’ at 

17 the end; and 

18 (3) by inserting after subparagraph (H) the fol19 lowing new subparagraph: 

20 ‘‘(I) assist small business concerns with 

21 finding resources for education and training on 

22 compliance with contracting regulations (includ23 ing the Federal Acquisition Regulation) after 

24 award of a contract or subcontract; and’’. 


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1 (e) REQUIREMENTS UNDER THE MENTOR-PROTEGE

2 PROGRAM OF THE SMALL BUSINESS ADMINISTRATION.— 

3 Section 45(b)(3) of the Small Business Act (15 U.S.C. 

4 657r(b)(3)) is amended by adding at the end the following 

5 new subparagraph: 

6 ‘‘(K) The extent to which assistance with 

7 compliance with the requirements of contracting 

8 with the Federal Government after award of a 

9 contract or subcontract under this section.’’. 

10 SEC. 205. RESPONSIBILITIES OF BUSINESS OPPORTUNITY 

11 SPECIALISTS. 

12 Section 4(g) of the Small Business Act (as added by 

13 section 865 of the National Defense Authorization Act for 

14 Fiscal Year 2016 (Public Law 114–92)) is amended— 

15 (1) in the subsection heading, by striking ‘‘CER16 TIFICATION REQUIREMENTS FOR’’; 

17 (2) in paragraph (2), by redesignating subpara18 graphs (A) and (B) as clauses (i) and (ii), respec19 tively (and conforming the margins accordingly); 

20 (3) by amending clause (ii) (as so redesignated) 

21 to read as follows: 

22 ‘‘(ii) APPLICATION.—The requirements 

23 of clause (i) shall be included in any initial 

24 job posting for the position of a Business 

25 Opportunity Specialist and shall apply to 


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1 any person appointed as a Business Oppor2 tunity Specialist after January 3, 2013.’’; 

3 (4) in clause (i) (as so redesignated), by striking 

4 ‘‘paragraph (1)’’ and inserting ‘‘subparagraph (A)’’ 

5 (5) by redesignating paragraphs (1) and (2) as 

6 subparagraphs (A) and (B), respectively (and con7 forming the margins accordingly); 

8 (6) in subparagraph (A) (as so redesignated), by 

9 striking ‘‘paragraph (2)’’ and inserting ‘‘subpara10 graph (B)’’; and 

11 (7) by inserting before subparagraph (A) (as so 

12 redesignated) the following: 

13 ‘‘(1) DUTIES.—The exclusive duties of a Business 

14 Opportunity Specialist employed by the Adminis15 trator and reporting to the senior official appointed 

16 by the Administrator with responsibilities under sec17 tions 8, 15, 31, and 36 (or the designee of such offi18 cial) shall be to implement sections 7, 8, and 45 and 

19 to complete other duties related to contracting pro20 grams under this Act. Such duties shall include— 

21 ‘‘(A) with respect to small business concerns 

22 eligible to receive contracts and subcontracts pur23 suant to section 8(a)— 

24 ‘‘(i) providing guidance, counseling, 

25 and referrals for assistance with technical, 


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1 management, financial, or other matters 

2 that will improve the competitive viability 

3 of such concerns; 

4 ‘‘(ii) identifying causes of success or 

5 failure of such concerns; 

6 ‘‘(iii) providing comprehensive assess7 ments of such concerns, including identi8 fying the strengths and weaknesses of such 

9 concerns; 

10 ‘‘(iv) monitoring and documenting 

11 compliance with the requirements of sec12 tions 7 and 8 and any regulations imple13 menting those sections; 

14 ‘‘(v) explaining the requirements of sec15 tions 7, 8, 15, 31, 36 and 45; and 

16 ‘‘(vi) advising on compliance with con17 tracting regulations (including the Federal 

18 Acquisition Regulation) after award of such 

19 a contract or subcontract; 

20 ‘‘(B) reviewing and monitoring compliance 

21 with mentor-protege agreements under section 

22 45; 

23 ‘‘(C) representing the interests of the Ad24 ministrator and small business concerns in the 

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1 tracts and subcontracts awarded pursuant to sec2 tion 8(a); and 

3 ‘‘(D) reporting fraud or abuse under section 

4 7, 8, 15, 31, 36 or 45 or any regulations imple5 menting such sections. 

6 ‘‘(2) CERTIFICATION REQUIREMENTS.—’’. 

7 TITLE III—STRENGTHENING OP8 PORTUNITIES FOR COMPETI9 TION IN SUBCONTRACTING 

10 SEC. 301. GOOD FAITH IN SUBCONTRACTING. 

11 (a) TRANSPARENCY IN SUBCONTRACTING GOALS.— 

12 Section 8(d)(9) of the Small Business Act (15 U.S.C. 

13 637(d)(9)) is amended— 

14 (1) by striking ‘‘(9) The failure’’ and inserting 

15 the following: 

16 ‘‘(9) MATERIAL BREACH.—The failure’’; 

17 (2) in subparagraph (A), by striking ‘‘or’’ at the 

18 end; 

19 (3) in subparagraph (B), by inserting ‘‘or’’ at 

20 the end; and 

21 (4) by inserting after subparagraph (B) the fol22 lowing: 

23 ‘‘(C) assurances provided under paragraph 

24 (6)(E),’’. 


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1 (b) AUTHORITY OF THE ADMINISTRATOR OF THE

2 SMALL BUSINESS ADMINISTRATION.—Section 8(d)(11) of 

3 the Small Business Act (15 U.S.C. 637(d)(11)) is amend4 ed— 

5 (1) by striking ‘‘(11) In the case of’’ and insert6 ing the following: 

7 ‘‘(11) AUTHORITY OF ADMINISTRATOR.—In the 

8 case of’’; and 

9 (2) in subparagraph (B), by striking ‘‘, which 

10 shall be advisory in nature,’’. 

11 (c) REVIEW AND ACCEPTANCE OF SUBCONTRACTING

12 PLANS.—Section 8(d) of the Small Business Act (15 U.S.C. 

13 637(d)) is amended by adding at the end the following: 

14 ‘‘(17) REVIEW AND ACCEPTANCE OF SUBCON15 TRACTING PLANS.— 

16 ‘‘(A) DEFINITION.—In this paragraph, the 

17 term ‘covered small business concerns’ means— 

18 ‘‘(i) small business concerns; 

19 ‘‘(ii) qualified HUBZone small busi20 ness concerns; 

21 ‘‘(iii) small business concerns owned 

22 and controlled by veterans; 

23 ‘‘(iv) small business concerns owned 

24 and controlled by service-disabled veterans; 


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1 ‘‘(v) small business concerns owned 

2 and controlled by socially and economically 

3 disadvantaged individuals, as defined in 

4 paragraph (3)(C); and 

5 ‘‘(vi) small business concerns owned 

6 and controlled by women. 

7 ‘‘(B) DELAYED ACCEPTANCE OF PLAN.—Ex8 cept as provided in subparagraph (E), if a pro9 curement center representative or commercial 

10 market representative determines that a subcon11 tracting plan required under paragraph (4) or 

12 (5) fails to provide the maximum practicable op13 portunity for covered small business concerns to 

14 participate in the performance of the contract to 

15 which the plan applies, the representative may 

16 delay acceptance of the plan in accordance with 

17 subparagraph (C). 

18 ‘‘(C) PROCESS FOR DELAYED ACCEPT19 ANCE.— 

20 ‘‘(i) IN GENERAL.—Except as provided 

21 in clause (ii), a procurement center rep22 resentative or commercial market represent23 ative who makes a determination under 

24 subparagraph (B) with respect to a subcon25 tracting plan may delay acceptance of the 


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1 plan for a 30-day period by providing writ2 ten notice of the determination to the head 

3 of the procuring activity of the contracting 

4 agency that includes recommendations for 

5 altering the plan to provide the maximum 

6 practicable opportunity described in that 

7 subparagraph. 

8 ‘‘(ii) EXCEPTION.—In the case of the 

9 Department of Defense— 

10 ‘‘(I) a procurement center rep11 resentative or commercial market rep12 resentative who makes a determination 

13 under subparagraph (B) with respect 

14 to a subcontracting plan may delay ac15 ceptance of the plan for a 15-day pe16 riod by providing written notice of the 

17 determination to appropriate personnel 

18 of the Department of Defense that in19 cludes recommendations for altering 

20 the plan to provide the maximum 

21 practicable opportunity described in 

22 that subparagraph; and 

23 ‘‘(II) the authority of a procure24 ment center representative or commer25 cial market representative to delay acVerDate Sep 11 2014 20:54 Jul 25, 2016 Jkt 059200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6203 E:\BILLS\H4341.RH H4341

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1 ceptance of a subcontracting plan as 

2 provided in subparagraph (B) does not 

3 include the authority to delay the 

4 award or performance of the contract 

5 concerned. 

6 ‘‘(D) DISAGREEMENTS.—If a procurement 

7 center representative or commercial market rep8 resentative delays the acceptance of a subcon9 tracting plan under subparagraph (C) and does 

10 not reach agreement with the head of the pro11 curing activity of the contracting agency to alter 

12 the plan to provide the maximum practicable op13 portunity described in subparagraph (B) not 

14 later than 30 days after the date on which writ15 ten notice was provided, the disagreement shall 

16 be submitted to the head of the contracting agen17 cy by the Administrator for a final determina18 tion. 

19 ‘‘(E) EXCEPTION.—A procurement center 

20 representative or commercial market representa21 tive may not delay the acceptance of a subcon22 tracting plan if the head of the contracting agen23 cy certifies that the need of the agency for the 

24 supplies or services is of such an unusual and 

25 compelling urgency that the United States would 


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1 be seriously injured unless the agency is per2 mitted to accept the subcontracting plan.’’. 

3 (d) GOOD FAITH COMPLIANCE.—Not later than 270 

4 days after the date of enactment of this Act, the Adminis5 trator of the Small Business Administration shall issue reg6 ulations providing examples of activities that would be con7 sidered a failure to make a good faith effort to comply with 

8 the requirements imposed on an entity (other than a small 

9 business concern as defined under section 3 of the Small 

10 Business Act (15 U.S.C. 632)) that is awarded a prime con11 tract containing the clauses required under paragraph (4) 

12 or (5) of section 8(d) of the Small Business Act (15 U.S.C. 

13 637(d)). 

14 SEC. 302. PILOT PROGRAM TO PROVIDE OPPORTUNITIES 

15 FOR QUALIFIED SUBCONTRACTORS TO OB16 TAIN PAST PERFORMANCE RATINGS. 

17 Section 8(d) of the Small Business Act (15 U.S.C. 

18 637(d)), as amended by section 301, is further amended by 

19 adding at the end the following new paragraph: 

20 ‘‘(18) PILOT PROGRAM PROVIDING PAST PER21 FORMANCE RATINGS FOR OTHER SMALL BUSINESS

22 SUBCONTRACTORS.— 

23 ‘‘(A) ESTABLISHMENT.—The Administrator 

24 shall establish a pilot program for a small busi25 ness concern performing as a first tier subconVerDate Sep 11 2014 20:54 Jul 25, 2016 Jkt 059200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6203 E:\BILLS\H4341.RH H4341

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1 tractor for a covered contract (as defined in 

2 paragraph 13(A)) to request a past performance 

3 rating in the system used by the Federal Govern4 ment to monitor or record contractor past per5 formance. 

6 ‘‘(B) APPLICATION.—A small business con7 cern described in subparagraph (A) shall submit 

8 an application to the appropriate official for a 

9 past performance rating. Such application shall 

10 include written evidence of the past performance 

11 factors for which the small business concern seeks 

12 a rating and a suggested rating. 

13 ‘‘(C) DETERMINATION.—The appropriate of14 ficial shall submit the application from the small 

15 business concern to the contracting officer (or a 

16 designee of such officer) for the covered contract 

17 and to the prime contractor for review. The con18 tracting officer (or designee) and the prime con19 tractor shall, not later than 30 days after receipt 

20 of the application, submit to the appropriate of21 ficial a response regarding the application. 

22 ‘‘(i) AGREEMENT ON RATING.—If the 

23 contracting officer (or designee) and the 

24 prime contractor agree on a past perform25 ance rating, or if either the contracting offiVerDate Sep 11 2014 20:54 Jul 25, 2016 Jkt 059200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6203 E:\BILLS\H4341.RH H4341

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1 cer (or designee) or the prime contractor 

2 fail to respond and the responding indi3 vidual agrees with the rating of the appli4 cant small business concern, the appro5 priate official shall enter the agreed-upon 

6 past performance rating in the system de7 scribed in subparagraph (A). 

8 ‘‘(ii) DISAGREEMENT ON RATING.—If 

9 the contracting officer (or designee) and the 

10 prime contractor fail to respond within 30 

11 days or if they disagree about the rating, or 

12 if either the contracting officer (or designee) 

13 or the prime contractor fail to respond and 

14 the responding individual disagrees with the 

15 rating of the applicant small business con16 cern, the contracting officer (or designee) or 

17 the prime contractor shall submit a notice 

18 contesting the application to appropriate of19 ficial. The appropriate official shall follow 

20 the requirements of subparagraph (D). 

21 ‘‘(D) PROCEDURE FOR RATING.—Not later 

22 than 14 calendar days after receipt of a notice 

23 under subparagraph (C)(ii), the appropriate offi24 cial shall submit such notice to the applicant 

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1 mit comments, rebuttals, or additional informa2 tion relating to the past performance of such 

3 concern not later 14 calendar days after receipt 

4 of such notice. The appropriate official shall 

5 enter the into the system described in subpara6 graph (A) a rating that is neither favorable nor 

7 unfavorable along with the initial application 

8 from the small business concern, the responses of 

9 the contracting officer (or designee) and the 

10 prime contractor, and any additional informa11 tion provided by the small business concern. 

12 ‘‘(E) USE OF INFORMATION.—A small busi13 ness subcontractor may use a past performance 

14 rating given under this paragraph to establish 

15 its past performance for a prime contract. 

16 ‘‘(F) DURATION.—The pilot program estab17 lished under this paragraph shall terminate 3 

18 years after the date on which the first small 

19 business concern receives a past performance rat20 ing for performance as a first tier subcontractor. 

21 ‘‘(G) REPORT.—The Comptroller General of 

22 the United States shall begin an assessment of 

23 the pilot program 1 year after the establishment 

24 of such program. Not later than 6 months after 

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1 eral shall submit a report to the Committee on 

2 Small Business and Entrepreneurship of the 

3 Senate and the Committee on Small Business of 

4 the House of Representatives, which shall in5 clude— 

6 ‘‘(i) the number of small business con7 cerns that have received past performance 

8 ratings under the pilot program; 

9 ‘‘(ii) the number of applications in 

10 which the contracting officer (or designee) 

11 or the prime contractor contested the appli12 cation of the small business concern; 

13 ‘‘(iii) any suggestions or recommenda14 tions the Comptroller General or the small 

15 business concerns participating in the pro16 gram have to address disputes between the 

17 small business concern, the contracting offi18 cer (or designee), and the prime contractor 

19 on past performance ratings; and 

20 ‘‘(iv) any suggestions or recommenda21 tion the Comptroller General has to improve 

22 the operation of the pilot program. 

23 ‘‘(H) APPROPRIATE OFFICIAL DEFINED.—In 

24 this paragraph, the term ‘appropriate official’ 

25 means a Commercial Market Representative or 


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1 other individual designated by the senior official 

2 appointed by the Administrator with responsibil3 ities under sections 8, 15, 31, and 36.’’. 

4 TITLE IV—MENTOR-PROTEGE 

5 PROGRAMS 

6 SEC. 401. AMENDMENTS TO THE MENTOR-PROTEGE PRO7 GRAM OF THE DEPARTMENT OF DEFENSE. 

8 Section 831 of the National Defense Authorization Act 

9 for Fiscal Year 1991 (Public Law 101–510; 104 Stat. 1607; 

10 10 U.S.C. 2302 note) is amended— 

11 (1) in subsection (d)— 

12 (A) by amending paragraph (1) to read as 

13 follows: 

14 ‘‘(1) prior to the approval of that agreement, the 

15 Administrator of the Small Business Administration 

16 had made no finding of affiliation between the mentor 

17 firm and the protege firm;’’; 

18 (B) by redesignating paragraph (2) as 

19 paragraph (3); and 

20 (C) by inserting after paragraph (1) the fol21 lowing new paragraph: 

22 ‘‘(2)(A) the Administrator of the Small Business 

23 Administration does not have a current finding of af24 filiation between the mentor firm and protege firm; or 


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1 ‘‘(B) the Secretary, after considering the regula2 tions promulgated by the Administrator of the Small 

3 Business Administration regarding affiliation— 

4 ‘‘(i) does not have reason to believe that the 

5 mentor firm affiliated with the protege firm; or 

6 ‘‘(ii) has received a formal determination of 

7 no affiliation between the mentor firm and pro8 tege firm from the Administrator after having 

9 submitted a question of affiliation to the Admin10 istrator; and’’; 

11 (2) in subsection (n), by amending paragraph 

12 (9) to read as follows: 

13 ‘‘(9) The term ‘affiliation’, with respect to a rela14 tionship between a mentor firm and a protege firm, 

15 means a relationship described under section 121.103 

16 of title 13, Code of Federal Regulations (or any suc17 cessor regulation).’’; and 

18 (3) in subsection (f)(6)— 

19 (A) in subparagraph (B), by striking ‘‘or’’ 

20 at the end; 

21 (B) in subparagraph (C), by striking the 

22 period at the end and inserting ‘‘; or’’; and 

23 (C) by adding at the end the following: 


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1 ‘‘(D) women’s business centers described in 

2 section 29 of the Small Business Act (15 U.S.C. 

3 656).’’. 

4 SEC. 402. IMPROVING COOPERATION BETWEEN THE MEN5 TOR-PROTEGE PROGRAMS OF THE SMALL 

6 BUSINESS ADMINISTRATION AND THE DE7 PARTMENT OF DEFENSE. 

8 Section 45(b)(4) of the Small Business Act (15 U.S.C. 

9 657r(b)(4)) is amended by striking subparagraph (A) and 

10 redesignating subparagraphs (B) and (C) as subparagraphs 

11 (A) and (B), respectively. 

12 TITLE V—MISCELLANEOUS 

13 SEC. 501. IMPROVING EDUCATION ON SMALL BUSINESS 

14 REGULATIONS. 

15 Section 15 of the Small Business Act (15 U.S.C. 644), 

16 as amended by section 204(c), is further amended by adding 

17 at the end the following new subsection: 

18 ‘‘(u) REGULATORY CHANGES AND TRAINING MATE19 RIALS.—Not less than annually, the Administrator shall 

20 provide to the Defense Acquisition University (established 

21 under section 1746 of title 10, United States Code), the Fed22 eral Acquisition Institute (established under section 1201 

23 of title 41, United States Code), the individual responsible 

24 for mandatory training and education of the acquisition 

25 workforce of each agency (described under section 


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1 1703(f)(1)(C) of title 41, United States Code), small busi2 ness development centers, and entities participating in the 

3 Procurement Technical Assistance Cooperative Agreement 

4 Program under chapter 142 of title 10, United States 

5 Code— 

6 ‘‘(1) a list of all changes made in the prior year 

7 to regulations promulgated— 

8 ‘‘(A) by the Administrator that affect Fed9 eral acquisition; and 

10 ‘‘(B) by the Federal Acquisition Council 

11 that implement changes to this Act; and 

12 ‘‘(2) any materials the Administrator has devel13 oped to explain, train, or assist Federal agencies or 

14 departments or small business concerns to comply 

15 with the regulations specified in paragraph (1).’’. 

16 SEC. 502. PROTECTING TASK ORDER COMPETITION. 

17 Section 4106(f) of title 41, United States Code, is 

18 amended by striking paragraph (3). 

19 SEC. 503. IMPROVEMENTS TO SIZE STANDARDS FOR SMALL 

20 AGRICULTURAL PRODUCERS. 

21 (a) AMENDMENT TO DEFINITION OF AGRICULTURAL

22 ENTERPRISES.—Paragraph (1) of section 18(b) of the 

23 Small Business Act (15 U.S.C. 647(b)(1)) is amended by 

24 striking ‘‘businesses’’ and inserting ‘‘small business con25 cerns’’. 


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1 (b) EQUAL TREATMENT OF SMALL FARMS.—Para2 graph (1) of section 3(a) of the Small Business Act (15 

3 U.S.C. 632(a)(1)) is amended by striking ‘‘operation: Pro4 vided,’’ and all that follows through the period at the end 

5 and inserting ‘‘operation.’’. 

6 (c) UPDATED SIZE STANDARDS.— 

7 (1) IN GENERAL.—Not later than 18 months 

8 after the date of enactment of this section, the Admin9 istrator of the Small Business Administration shall, 

10 by rule, establish size standards in accordance with 

11 section 3 of the Small Business Act (15 U.S.C. 632) 

12 for agricultural enterprises (as such term is defined 

13 in section 18(b)(1) of such Act). 

14 (2) REVIEW.—Size standards established under 

15 subsection (a) are subject to the rolling review proce16 dures established under section 1344(a) of the Small 

17 Business Jobs Act of 2010 (15 U.S.C. 632 note). 

18 SEC. 504. UNIFORMITY IN SERVICE-DISABLED VETERAN 

19 DEFINITIONS. 

20 (a) SMALL BUSINESS DEFINITION OF SMALL BUSI21 NESS CONCERN CONSOLIDATED.—Section 3(q) of the Small 

22 Business Act (15 U.S.C. 632(q)) is amended— 

23 (1) by amending paragraph (2) to read as fol24 lows: 


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1 ‘‘(2) SMALL BUSINESS CONCERN OWNED AND

2 CONTROLLED BY SERVICE-DISABLED VETERANS.—The 

3 term ‘small business concern owned and controlled by 

4 service-disabled veterans’ means any of the following: 

5 ‘‘(A) A small business concern— 

6 ‘‘(i) not less than 51 percent of which 

7 is owned by one or more service-disabled 

8 veterans or, in the case of any publicly 

9 owned business, not less than 51 percent of 

10 the stock (not including any stock owned by 

11 an ESOP) of which is owned by one or 

12 more service-disabled veterans; and 

13 ‘‘(ii) the management and daily busi14 ness operations of which are controlled by 

15 one or more service-disabled veterans or, in 

16 the case of a veteran with permanent and 

17 severe disability, the spouse or permanent 

18 caregiver of such veteran. 

19 ‘‘(B) A small business concern— 

20 ‘‘(i) not less than 51 percent of which 

21 is owned by one or more service-disabled 

22 veterans with a disability that is rated by 

23 the Secretary of Veterans Affairs as a per24 manent and total disability who are unable 


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1 to manage the daily business operations of 

2 such concern; or 

3 ‘‘(ii) in the case of a publicly owned 

4 business, not less than 51 percent of the 

5 stock (not including any stock owned by an 

6 ESOP) of which is owned by one or more 

7 such veterans. 

8 ‘‘(C)(i) During the time period described in 

9 clause (ii), a small business concern that was a 

10 small business concern described in subpara11 graph (A) or (B) immediately prior to the death 

12 of a service-disabled veteran who was the owner 

13 of the concern, the death of whom causes the con14 cern to be less than 51 percent owned by one or 

15 more service-disabled veterans, if— 

16 ‘‘(I) the surviving spouse of the de17 ceased veteran acquires such veteran’s own18 ership interest in such concern; 

19 ‘‘(II) such veteran had a service-con20 nected disability (as defined in section 

21 101(16) of title 38, United States Code) 

22 rated as 100 percent disabling under the 

23 laws administered by the Secretary of Vet24 erans Affairs or such veteran died as a re25 sult of a service-connected disability; and 


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1 ‘‘(III) immediately prior to the death 

2 of such veteran, and during the period de3 scribed in clause (ii), the small business 

4 concern is included in the database de5 scribed in section 8127(f) of title 38, United 

6 States Code. 

7 ‘‘(ii) The time period described in this 

8 clause is the time period beginning on the date 

9 of the veteran’s death and ending on the earlier 

10 of— 

11 ‘‘(I) the date on which the surviving 

12 spouse remarries; 

13 ‘‘(II) the date on which the surviving 

14 spouse relinquishes an ownership interest in 

15 the small business concern; or 

16 ‘‘(III) the date that is 10 years after 

17 the date of the death of the veteran.’’; and 

18 (2) by adding at the end the following new para19 graphs: 

20 ‘‘(6) ESOP.—The term ‘ESOP’ has the meaning 

21 given the term ‘employee stock ownership plan’ in sec22 tion 4975(e)(7) of the Internal Revenue Code of 1986 

23 (26 U.S.C. 4975(e)(7)). 


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1 ‘‘(7) SURVIVING SPOUSE.—The term ‘surviving 

2 spouse’ has the meaning given such term in section 

3 101(3) of title 38, United States Code.’’. 

4 (b) VETERANS AFFAIRS DEFINITION OF SMALL BUSI5 NESS CONCERN CONSOLIDATED.— 

6 (1) IN GENERAL.—Section 8127 of title 38, 

7 United States Code, is amended— 

8 (A) by striking subsection (h) and redesig9 nating subsections (i) through (l) as subsections 

10 (h) through (k), respectively; and 

11 (B) in subsection (k), as so redesignated— 

12 (i) by amending paragraph (2) to read 

13 as follows: 

14 ‘‘(2) The term ‘small business concern owned and 

15 controlled by veterans’ has the meaning given that 

16 term under section 3(q)(3) of the Small Business Act 

17 (15 U.S.C. 632(q)(3)).’’; and 

18 (ii) by adding at the end the following 

19 new paragraph: 

20 ‘‘(3) The term ‘small business concern owned and 

21 controlled by veterans with service-connected disabil22 ities’ has the meaning given the term ‘small business 

23 concern owned and controlled by service-disabled vet24 erans’ under section 3(q)(2) of the Small Business Act 

25 (15 U.S.C. 632(q)(2)).’’. 


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1 (2) CONFORMING AMENDMENTS.—Such section is 

2 further amended— 

3 (A) in subsection (b), by inserting ‘‘or a 

4 small business concern owned and controlled by 

5 veterans with service-connected disabilities’’ after 

6 ‘‘a small business concern owned and controlled 

7 by veterans’’; 

8 (B) in subsection (c), by inserting ‘‘or a 

9 small business concern owned and controlled by 

10 veterans with service-connected disabilities’’ after 

11 ‘‘a small business concern owned and controlled 

12 by veterans’’; 

13 (C) in subsection (d) by inserting ‘‘or small 

14 business concerns owned and controlled by vet15 erans with service-connected disabilities’’ after 

16 ‘‘small business concerns owned and controlled 

17 by veterans’’ both places it appears; and 

18 (D) in subsection (f)(1), by inserting ‘‘, 

19 small business concerns owned and controlled by 

20 veterans with service-connected disabilities,’’ 

21 after ‘‘small business concerns owned and con22 trolled by veterans’’. 

23 (c) TECHNICAL CORRECTION.—Section 8(d)(3) of the 

24 Small Business Act (15 U.S.C. 637(d)(3)), is amended by 

25 adding at the end the following new subparagraph: 


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1 ‘‘(H) In this contract, the term ‘small business 

2 concern owned and controlled by service-disabled vet3 erans’ has the meaning given that term in section 

4 3(q).’’. 

5 (d) REGULATIONS RELATING TO DATABASE OF THE

6 SECRETARY OF VETERANS AFFAIRS.— 

7 (1) REQUIREMENT TO USE CERTAIN SMALL BUSI8 NESS ADMINISTRATION REGULATIONS.—Section 

9 8127(f)(4) of title 38, United States Code, is amended 

10 by striking ‘‘verified’’ and inserting ‘‘verified, using 

11 regulations issued by the Administrator of the Small 

12 Business Administration with respect to the status of 

13 the concern as a small business concern and the own14 ership and control of such concern,’’. 

15 (2) PROHIBITION ON SECRETARY OF VETERANS

16 AFFAIRS ISSUING CERTAIN REGULATIONS.—Section 

17 8127(f) of title 38, United States Code, is amended by 

18 adding at the end the following new paragraph: 

19 ‘‘(7) The Secretary may not issue regulations related 

20 to the status of a concern as a small business concern and 

21 the ownership and control of such small business concern.’’. 

22 (e) DELAYED EFFECTIVE DATE.—The amendments 

23 made by subsections (a), (b), (c), and (d) shall take effect 

24 on the date on which the Administrator of the Small Busi25 ness Administration and the Secretary of Veterans Affairs 


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1 jointly issue regulations implementing such sections. Such 

2 date shall be not later than 18 months after the date of en3 actment of this Act. 

4 (f) APPEALS OF INCLUSION IN DATABASE.— 

5 (1) IN GENERAL.—Section 8127(f) of title 38, 

6 United States Code, as amended by section 504(d)(2), 

7 is further amended by adding at the end the following 

8 new paragraph: 

9 ‘‘(8)(A) If the Secretary does not verify a concern for 

10 inclusion in the database under this subsection based on 

11 the status of the concern as a small business concern or the 

12 ownership or control of the concern, the concern may appeal 

13 the denial of verification to the Office of Hearings and Ap14 peals of the Small Business Administration (as established 

15 under section 5(i) of the Small Business Act). The decision 

16 of the Office of Hearings and Appeals shall be considered 

17 a final agency action. 

18 ‘‘(B)(i) If an interested party challenges the inclusion 

19 in the database of a small business concern owned and con20 trolled by veterans or a small business concern owned and 

21 controlled by veterans with service-connected disabilities 

22 based on the status of the concern as a small business con23 cern or the ownership or control of the concern, the challenge 

24 shall be heard by the Office of Hearings and Appeals of 

25 the Small Business Administration as described in subVerDate Sep 11 2014 20:54 Jul 25, 2016 Jkt 059200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6203 E:\BILLS\H4341.RH H4341

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1 paragraph (A). The decision of the Office of Hearings and 

2 Appeals shall be considered final agency action. 

3 ‘‘(ii) In this subparagraph, the term ‘interested party’ 

4 means— 

5 ‘‘(I) the Secretary; and 

6 ‘‘(II) in the case of a small business concern that 

7 is awarded a contract, the contracting officer of the 

8 Department or another small business concern that 

9 submitted an offer for the contract that was awarded 

10 to the small business concern that submitted an offer 

11 under clause (i). 

12 ‘‘(C) For each fiscal year, the Secretary shall reim13 burse the Administrator of the Small Business Administra14 tion in an amount necessary to cover any cost incurred by 

15 the Office of Hearings and Appeals of the Small Business 

16 Administration for actions taken by the Office under this 

17 paragraph. The Administrator is authorized to accept such 

18 reimbursement. The amount of any such reimbursement 

19 shall be determined jointly by the Secretary and the Admin20 istrator and shall be provided from fees collected by the Sec21 retary under multiple-award schedule contracts. Any dis22 agreement about the amount shall be resolved by the Direc23 tor of the Office of Management and Budget.’’. 

24 (2) EFFECTIVE DATE.—Paragraph (8) of sub25 section (f) of title 38, United States Code, as added 


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1 by paragraph (1), shall apply with respect to a 

2 verification decision made by the Secretary of Vet3 erans Affairs on or after the date of the enactment of 

4 this Act. 

5 SEC. 505. GAO REVIEW OF THE OFFICE OF GOVERNMENT 

6 CONTRACTING AND BUSINESS DEVELOPMENT 

7 OF THE SMALL BUSINESS ADMINISTRATION. 

8 (a) STUDY.—Not later than 60 days after the date of 

9 the enactment of this Act, the Comptroller General of the 

10 United States shall initiate a review of the Office of Govern11 ment Contracting and Business Development of the Small 

12 Business Administration. Such review shall examine— 

13 (1) the extent to which the personnel of the Small 

14 Business Administration who carry out procurement 

15 and business development programs report to the Of16 fice of Government Contracting and Business Devel17 opment; 

18 (2) whether greater efficiency and consistency in 

19 the certification process of procurement and business 

20 development programs could be achieved by creating 

21 a single organizational unit of employees to process 

22 all certifications required by procurement and busi23 ness development programs; 

24 (3) whether greater efficiency and efficacy in the 

25 performance of procurement and business development 


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1 programs could be achieved by improving the align2 ment of the field personnel assigned to such programs; 

3 (4) how the Office of Government Contracting 

4 and Business Development could improve its staffing 

5 of regulatory drafting functions and its coordination 

6 with the Federal Acquisition Regulatory Council to 

7 ensure timely rulemaking by the Small Business Ad8 ministration; and 

9 (5) any other areas in which the Comptroller 

10 General determines that the Small Business Adminis11 tration could improve its performance with respect to 

12 procurement and business development programs. 

13 (b) REPORT.—Not later than 1 year after initiating 

14 the review required by paragraph (1), the Comptroller Gen15 eral shall submit a report including the results of the re16 view, along with any recommendations for improvements 

17 or other suggestions with respect to procurement and busi18 ness development programs, to the Committee on Small 

19 Business of the House of Representatives and the Committee 

20 on Small Business and Entrepreneurship of the Senate. 

21 (c) PROCUREMENT AND BUSINESS DEVELOPMENT

22 PROGRAM DEFINED.—In this Act, the term ‘‘procurement 

23 and business development program’’ means a program re24 lated to procurement or business development established 


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1 under section 7, 8, 15, 31, 36, 44, 45, or 46 of the Small 

2 Business Act (15 U.S.C. 631 et seq.). 

3 SEC. 506. REQUIRED REPORTS PERTAINING TO CAPITAL 

4 PLANNING AND INVESTMENT CONTROL. 

5 The information described in 11302(c)(3)(B)(ii) of 

6 title 40, United States Code, shall be submitted to the Sen7 ate Committee on Small Business and Entrepreneurship 

8 and the Committee on Small Business of the House of Rep9 resentatives within 10 days of transmittal to the Director. 

10 SEC. 507. GAO REVIEW OF SURETY BONDS. 

11 Not later than 60 days after the date of the enactment 

12 of this Act, the Comptroller General of the United States 

13 shall initiate a review of surety bonds as they apply to fed14 eral small business procurement contracts. The review shall 

15 examine how frequently bonding requirements are waived 

16 by federal agencies, an explanation of the standard and 

17 process for waiving the requirements, an explanation of the 

18 review process for such waivers, and in cases when bond 

19 requirements are waived, how results compare to instances 

20 where requirements are not waived, and the process that 

21 whistleblowers go through when instances of fraud related 

22 to surety bonds are reported. 


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Union Calendar No. 545 

114TH CONGRESS 

2D SESSION H. R. 4341 

[Report No. 114–704, Part I] 

A BILL 

To amend the Small Business Act to improve 

tracting, and for other purposes. crease opportunities for competition in subconclarify the role of small business advocates, to intransparency and clarity for small businesses, to 

JULY 25, 2016 

Reported from the Committee on Small Business with an 

amendment 

JULY 25, 2016 

The Committees on Armed Services, Oversight and Govthe State of the Union and ordered to be printed committed to the Committee of the Whole House on ernment Reform, and Veterans’ Affairs discharged; 


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